ReverseTalk: Episode 1: John Lunde

What’s the outlook for loan volumes this year? How can I find the best areas to market to in my region? To answer this and other questions we sat down with Reverse Market Insight CEO John Lunde. RMI closely tracks our industry’s loan production and other trends.

1 comment

The Positive RealistFebruary 1, 2019 at 11:04 am

Shannon, really great interview. HOWEVER, listeners must realize the interview was given almost 10 weeks ago, a lifetime in this industry.

John is upbeat and provides a message of recovery. Being upbeat is great but as seen in the first months of fiscal 2019, recovery is not in the immediate future. On June 6, 2018, John told us that the reduction in endorsements caused by the changes mandated by HUD on 10/2/2017 were over beginning on May 1, 2018. Since May 2018, we have seen a single month that has had endorsements as high as April 2018. The endorsements in November 2018 was 2,553 while in April 2018, the endorsement total was 3,345 which is 31% HIGHER than the endorsements SEVEN months later.

The reason for not using the low endorsements numbers in either December 2018 or January 2019 is that it is generally believed the government shutdown negatively impacted the orderly processing of closed loans at HUD. It would seem the endorsement counts for February and March 2019 should be inordinately higher as HUD catches on their workload.

Using case number assignment data for the four consecutive month information ended on September 30, 2018, there should have been about 11,800 endorsements rather than the 9,044 actually reported by HUD. If that is representative for the next 2 four-month periods, means we can expect about 35,400 endorsements for fiscal year 2019, which is a 26.8% drop in endorsements when compared to the actual endorsement count for fiscal 2018 (of 48,359 endorsements).

As to HECMs, where is this road to recovery? Does that mean that we are seeing higher endorsements NOW? Obviously not but does that mean we will be seeing substantially higher HECM endorsements soon? That as well, seems doubtful. Have proprietary reverse mortgage closings completely filled in the gap of lost endorsements? If you believe that, then you most likely believe that the second appraisal rule is actually going to produce a positive balance for the HECM portion of the MMIF on 9/30/2019.

BUT then again the interview occurred at the 2018 NRMLA Convention, where all things are POSSIBLE!!!